Designated to become a Center of Excellence
Designated to become a Center of Excellence
Apart from Indonesia-Kuwait mutual sociopolitical principals, the oil sector has been the main propellant in their economic relations in recent years.
And one of the most notable investments that Kuwait launched here in Indonesia was in 1995 through the mega project of PT Hemoco Selayar International Oil Refinery in the 100-kilometer- long Selayar Island, located in the southern tip of South Sulawe si.
The $4 billion project, 60 percent owned by Hemoco Kuwait General Trading & Contracting Company with the remaining 40 percent by its Indonesian partner PT Kilang Minyak Bumi Selayar, is a massive oil refinery complex consisting of an oil refinery, petrochemical plant, marine terminal, and an industrial and residential area.
The island, currently inhabited by some 100,000 people, is chosen for its strategic location both for import of crude as well as export of products to Asia. The deep water access adja cent to the refinery site guarantees efficiemcy in transporta tion, and the plant lies at the gateway to the eastern part of Indonesia.
After years of a thorough strategic and integrated develop ment planning and with strong supports from related state insti tutions of both governments and the provincial authorities, the initial construction stage of this strategically vital refinery will be started, insya Allah (if God willing), soon this year, or 2003 at the latest.
At this time, Hemoco is at the final preparation stages for the construction of the jumbo oil refinery complex. Giant bidders from The Netherlands, Germany and the States are currently par ticipating in the beauty contest for the main EPC (...) contrac tor of the project.
The early development phases of the refinery will help enhance the economy and quality of life of the locals. The con truction of the plant and all necessary supporting infrastruc tures, such as roads, harbors, and medical, education and train ing facilities, will maximize the employment of Selayar inhabi tants which later could encourage other industries to develop.
And once the project is completed, the Hemoco refinery will provide significant contribution to the Indonesian economy as it will create 2,500 job opportunities and be the locomotive engine for the development of the area and also bring multiplier effects to the Indonesian national development. The project is also expected to boost Indonesia's foreign exchange earnings of at least $400 million per year from import substitution and exports.
The commitment of Hemoco joint venture to develop the multi- billion project was not affected by the economic turmoil, which now enters its fifth year. But there are several things that bring serious headaches to the company, namely the implementation of the newly-approved oil and gas deregulation particularly on the retail market policy.
Just like other projects that heavily depend of foreign investors, Hemoco also hopes for a social and political stability and several incentives like tax holiday.
From the beginning in developig the project concept, Hemoco has designed an environmentally friendly state-of-the-art facili ty which incorporates the latest technology. The project will adopt the world's best practice in its environmental impact assessment, project planning and protection of the unique marine ecological environment in the surrounding areas, particularly the world-renowned Taka Bonerate water.
An initial oceanic study analyst indicate the project will not pollute the famous Taka Bonerate water, which is located about 120 kilometers from the refinery site.
One of Hemoco's subsidiary, Selayar International Develop ment Company, for instance, will help develop tourism in the southern part of the Selayar Island.
In essence, Hemoco does not want to develop Selayar Island to simply become the exclusive site for their business project but a center of excellence for the oil and downstream petrochem cial industry in Indonesia.